Practicing effective healthcare risk management protects your patients and staff. It improves the quality and delivery of patient care and ensures the long-term stability of your organization.
Successful strategic risk management is an ongoing process that requires data-driven insights, meaningful collaboration, and active oversight.
The board of directors plays a pivotal role in healthcare risk management, ensuring the organization identifies, evaluates, and mitigates risks in a way that protects patients, staff, and assets. Their responsibility is both strategic and fiduciary, and their oversight is essential for maintaining regulatory compliance and operational resiliency.
It’s important to understand the board’s role in a health system’s risk management and how a board management solution for healthcare organizations simplifies and improves the risk planning process.
What is Healthcare Risk Management?
Healthcare risk management is the process of identifying, evaluating, and reducing potential risks to a health system. Boards who place a priority on effectively managing risk position the organization to maintain compliance, achieve objectives, and make informed organizational decisions.
Well-executed risk management ensures organizations remain compliant with the many laws and regulations surrounding healthcare services, such as:
- HIPAA compliance
- SOC 2 Type II compliance
- Centers for Medicare and Medicaid Services compliance
- State-specific licensing and operational standards
While specific risks vary based on the organization’s structure and type of services, failure to address these risks could impact the safety of patients and staff, quality of services, legal compliance, and long-term goals.
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Understanding the Board’s Role in Healthcare Risk Management Compliance
While a health system’s board takes the lead when it comes to risk management compliance, it doesn’t function alone. The board works alongside key stakeholders, such as executive leadership, a risk committee, a hospital compliance committee, and legal advisors. The board must communicate with these participants throughout the process of initial development, ongoing management, and future revisions.
Here are 5 ways a board maintains healthcare risk management compliance.
1. Setting the Risk Appetite
A risk appetite is simply how much risk an organization is willing to pursue to meet its goals. It sets the stage for risk management compliance because it defines how much risk an organization is willing to take.
Risk appetites vary based on different activities or parts of the organization. For instance, a board may set a high appetite for innovation but a low appetite for financial and reputational risks. The board must set risk appetite based on data and stakeholder feedback, ensuring it aligns with the organization’s mission statement and values.
2. Establishing a Risk Governance Framework
A risk governance framework, part of a larger enterprise risk management strategy, enables a board to navigate the multiple aspects of risk management. It allows the board to proactively address potential threats, pinpoint compliance issues, and implement safeguards against risk.
A risk governance framework includes these components:
- Identify risks
- Evaluate and analyze risks
- Determine risk mitigation options
- Actively monitor risks
- Follow up and revise risks
Establishing a cohesive framework ensures healthcare organizations maintain regulatory compliance, meet required minimum standards, and improve accountability.
3. Linking Risk to Strategy
Linking risk to strategy enables organizations to assess possible risks while continuing to meet objectives. Boards prioritize risks based on the impact, often using a risk matrix to determine the level of risk and the likelihood of one risk developing into additional risks.
In the strategic risk assessment process, an organization may adjust its action plan to align with an approved level of risk. If boards overlook linking risk to strategy, an organization could inadvertently expose itself to a high level of risk. Evaluating risks as part of an organization’s strategic plan helps organizations proactively react to potential risks while advancing toward strategic goals.
4. Reviewing Regular Risk Reports
In the healthcare industry, risk management is a continuous and ever-changing process. Boards must establish a system for regular review to receive accurate data in a timely manner. In reviewing risk reports, boards analyze key risk indicators, compliance metrics, and risk mitigation performance.
The process also includes identifying and prioritizing new risks, especially in connection with changes in compliance laws or regulations. Collaboration remains important during risk report review, especially with compliance and legal departments, so healthcare boards continue to make informed risk management decisions.
5. Holding Leadership Accountable
Create procedures to maintain risk management accountability. Identify roles and responsibilities for obtaining, distributing, evaluating, and following up on risk reports. Determine how to provide oversight to ensure proper performance of risk management duties. Consider funding board training, such as enterprise risk management certification, to ensure your board follows best practices relating to risk and compliance.
Introducing OnBoard AI
OnBoard AI empowers board administrators to streamline board management, improve collaboration, and track results.
OnBoard AI provides state-of-the art tools to help boards:
- Quickly create a complete board meeting agenda based on verbal prompts or sources
- Record meetings and automatically receive a full transcript with summaries
- Highlight related decisions and risk-related language or content
- Instantly flag compliance issues or areas requiring legal oversight
- Seamlessly identify follow-up issues to automate governance
OnBoard’s AI-powered tools provide a secure and efficient approach for boards to increase transparency, improve engagement, and track organizational performance.
How OnBoard Supports Healthcare Organizations
Effective healthcare risk management is only possible with accurate data, timely feedback, and responsive follow-up. OnBoard’s comprehensive board management solution provides efficient tools to simplify meeting management and achieve successful outcomes.
Designed to meet the needs of healthcare industry organizations, OnBoard delivers a HIPAA and HRSA-compliant board portal, providing centralized access to board meeting materials, documents, and data.
OnBoard enhances healthcare risk management governance with private communication, secure encryptions, and access control. Robust features empower you to protect your organization and reduce risk while providing intuitive tools to help you achieve your goals.
Schedule a free trial to see how OnBoard improves healthcare board management.
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About The Author
- Kelli Thomas is a customer success manager who joined OnBoard in 2022 and specialized in working with health care boards to meet their ever-changing needs. Her favorite part of the job is building relationships with clients, addressing their needs, and providing solutions. An Indiana University-Purdue University Indianapolis graduate, Kelli lives in Greenwood, Indiana, and enjoys spending time with her husband, son, and dog.
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